Indian Government Allocates ₹10,000 Crore to Urban Challenge Fund for City Development
Govt to provide ₹10,000 cr support for cities under ₹1 trillion Urban Fund
Business Standard
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The Indian government has announced a ₹10,000 crore allocation to support cities through the Urban Challenge Fund (UCF), aimed at enhancing project bankability and leveraging private finance. The initiative will focus on urban infrastructure projects in cities with populations over 1 million and aims to improve financial sustainability and creditworthiness of urban local bodies.
- 01₹10,000 crore allocated for the Urban Challenge Fund to support city projects.
- 02Central assistance for projects under the fund totals ₹90,000 crore.
- 03Funding will be released in three tranches based on project delivery.
- 04Credit Repayment Guarantee Sub-Scheme targets urban local bodies with limited credit history.
- 05Focus on leveraging private finance for sustainable urban infrastructure.
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The Indian government has unveiled a significant initiative to bolster urban infrastructure with the allocation of ₹10,000 crore to the Urban Challenge Fund (UCF). This fund aims to support cities in making projects bankable and attracting private finance. The total central assistance under the UCF is set at ₹90,000 crore, with ₹5,000 crore earmarked for Project Preparation and Capacity Building and another ₹5,000 crore for the Credit Repayment Guarantee Sub-Scheme (CRGSS). The scheme is designed for cities with a projected population of 1 million or more and aims to enhance the creditworthiness of urban local bodies (ULBs), especially those in northeastern and hilly states. Funding will be disbursed in three tranches, with 30% released initially to kickstart projects, while the remaining 70% will depend on project delivery and outcomes. The initiative seeks to address long-standing issues in urban infrastructure planning and financing, ensuring projects demonstrate long-term financial sustainability and viable revenue models.
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This funding initiative will enhance the capacity of urban local bodies to undertake significant infrastructure projects, potentially improving living conditions and economic opportunities in cities.
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